Practice Questions
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What is the primary consequence of implementing a price ceiling in a market?
A price ceiling is a limit on how high a price can be. Other options are incorrect because Some might think a price ceiling means more goods will be a...
How does the implementation of a price ceiling affect producer surplus in a market?
A price ceiling sets a maximum price that can be charged. Other options are incorrect because Some might think that higher prices mean more profit; It...
When a price ceiling is set below the equilibrium price in a market, which of the following outcomes is most likely to occur?
When the price is set too low, more people want to buy the product, but producers don't want to sell as much. Other options are incorrect because Some...
How does the imposition of a price ceiling typically affect consumer surplus, and what are the implications for economic inefficiency in a market experiencing a shortage?
A price ceiling makes goods cheaper, but it can lead to shortages. Other options are incorrect because This answer suggests that a price ceiling helps...
What is a potential long-term effect of a price ceiling that creates a shortage in the market?
When a price ceiling is set too low, suppliers may not want to make as many goods. Other options are incorrect because Some might think that lower pri...
What effect does a price ceiling typically have on a market for a good?
A price ceiling is a limit on how high a price can go. Other options are incorrect because Some might think a price ceiling leads to extra goods; It's...
What occurs in a market when a price ceiling is set below the equilibrium price?
When a price ceiling is below the equilibrium price, it means prices can't go high enough. Other options are incorrect because Some might think a surp...
What is the likely effect of a price ceiling on a market where the demand exceeds supply?
A price ceiling is a limit on how high a price can go. Other options are incorrect because Some might think that a price ceiling makes sellers produce...
If a government sets a price ceiling below the market equilibrium price, what is the likely outcome?
When a price ceiling is set below the market equilibrium price, it means the price is too low. Other options are incorrect because Some might think th...
A city government has implemented a price ceiling of $5 on bottled water during a summer heatwave. As a result, the demand for bottled water has significantly increased, but suppliers are unable to meet this demand at the imposed price. What is the most likely outcome of this price ceiling in the market for bottled water?
When the price is set too low, more people want to buy water than what is available. Other options are incorrect because Some might think that if pric...
If a government imposes a price ceiling on a product that is below the market equilibrium price, what is the most likely outcome in the market for that product?
When the price is set too low, more people want to buy the product than what is available. Other options are incorrect because Some might think that l...
Price ceiling is to market shortage as price floor is to what?
A price floor sets a minimum price. Other options are incorrect because Some might think higher prices lead to more demand; Equilibrium price is where...
Arrange the following steps that occur when a price ceiling is imposed on a market good, starting from the initial imposition of the ceiling to the resulting market outcome.
When the government sets a price ceiling below the market price, it makes the good cheaper. Other options are incorrect because Some might think that ...
When a price ceiling is set below the market equilibrium price, it creates a situation where the quantity demanded exceeds the quantity supplied, leading to a __________.
A price ceiling is a limit on how high a price can go. Other options are incorrect because A surplus happens when there are too many goods and not eno...
A government sets a price ceiling on a basic food item, resulting in a significant shortage. Which of the following best explains why this situation occurred?
A price ceiling is a limit on how high a price can go. Other options are incorrect because Some might think that setting a high price would lead to to...
If a price ceiling is set below the market equilibrium price, what is the most likely outcome?
When a price ceiling is below the market price, it means sellers can't charge enough. Other options are incorrect because Some might think that lower ...
Which of the following outcomes can result from the implementation of a price ceiling in a market? Select all that apply.
A price ceiling sets a maximum price for a good. Other options are incorrect because Some might think a price ceiling causes shortages; People may bel...
Master Price Ceilings and Market Outcomes
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